Why Stagwell Stock Surged Today
Key Points
Stagwell's shift to AI-driven offerings is boosting its profits.
Management sees revenue rising as much as 12% in 2026.
- 10 stocks we like better than Stagwell ›
Shares of Stagwell (NASDAQ: STGW) popped on Tuesday after the artificial intelligence (AI)-powered marketing specialist issued an upbeat growth forecast.
By the close of trading, Stagwell's stock price was up more than 17%.
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AI-driven gains
Stagwell's net revenue grew 3% year over year to $651 million in the fourth quarter. Excluding advocacy-related sales, which fluctuate with the political cycle, the advertising technology company's net revenue rose 8% to $609 million.
Stagwell's adjusted earnings, in turn, jumped 20% to $0.30 per share.
"In 2025, Stagwell increased its strategic pivot toward AI applications and services, building a powerful foundation for 2026," CEO Mark Penn said. "With accelerating growth ex-advocacy, record net new business, expanding margins, and doubled free cash flow, our FY25 results prove our strategy is working."
A new partnership should fuel further growth
Stagwell also announced a deal with mobile app development platform AppLovin (NASDAQ: APP). The two companies will work together to help marketers create more effective mobile ad campaigns.
The agreement will give Stagwell's clients access to over a billion potential customers via AppLovin's mobile gaming network.
"AppLovin's platform offers powerful reach and performance capabilities for our clients looking to drive measurable outcomes in mobile environments," Penn said.
Stagwell expects its net revenue to grow by 8% to 12% in 2026, driven by its mobile and AI-powered offerings.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
